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LINDA WERTHEIMER, host:

Timothy Noah is a senior writer for the online magazine Slate, and he has written a 10-part series for the magazine on the growth of income inequality in this country. The series is called "The Great Divergence," and he joins us to talk about wealth.

Welcome.

Mr. TIMOTHY NOAH (Slate): Thank you, Linda.

WERTHEIMER: This Forbes list that weve been talking about - the 400 richest people in the United States - does make one thing clear, and that is a huge amount of wealth in this country is controlled by a very small number of people. It seems to me that its a historically small number of people. Say, for example, the roaring '20s - who controlled the wealth in this country then?

Mr. NOAH: We saw a comparable distribution of incomes back then. Really, the last time we saw this kind of distortion in the distribution of income was in the 1920s. It ended, of course, in 1929 with the crash, and after that we had a very long period in the United States where incomes grew more and more. That reversed itself at the end of the 1970s, and ever since then incomes have been growing more and more unequal.

WERTHEIMER: Among the rich, let's define who is rich. You have three kinds of rich.

Mr. NOAH: That's right. The sort of rich - people making, say, more than about $100,000 a year. Rich - people making more than, say, $360,000 a year; they occupy the top one percent. And the stinking rich, who make more than a million dollars a year; they occupy the top 0.1 percent. And it's really that top one percent and 0.1 percent, the rich and the stinking rich, who at least since the early '90s have really been driving this inequality trend.

WERTHEIMER: Another thing that is fascinating about these numbers is that weve just come through a period of very serious economic hard times. The rich got eight percent richer in that period.

Mr. NOAH: Yeah.

WERTHEIMER: How does that happen?

Mr. NOAH: That's one of the really remarkable things about this recession, is Wall Street caused this recession and yet Wall Street recovered from it while the rest of the country is still suffering from unemployment that's close to 10 percent.

WERTHEIMER: So when we're talking about the income gap, what about the people that are on the other side of the income gap? Weve talked about the rich getting richer. Why is everybody else sinking?

Mr. NOAH: Well, I tried to look at all the various reasons, potential reasons and actual reasons, in my series, and I found some surprises. Gender and race appear to play no role in this increase. Obviously there are inequalities related to gender and race, but the increase since 1979 has nothing to do with gender or race.

WERTHEIMER: The increase in?

Mr. NOAH: In income equality. Education appears to have played a very big role, but not necessarily in the way that people think. Computers increased demand for an educated workforce. They were a lot like other technological advances through the 20th century. But previously, when there was such a technological advance say, the advent of electricity - the educational system was always able to produce more educated people in the form of more high school graduates. That really stopped. Another very significant factor, which is fairly obvious to a lot of people, is the decline of labor.

Labor played a very important role, not just in protecting wages for individual workers, but also in influencing the course of government. That has declined radically.

WERTHEIMER: Is income inequality in and of itself a bad thing?

Mr. NOAH: Well, there are a lot of people who say that's just the way of capitalism. That's just the way capitalism works and capitalism has grown more efficient over the last 40 years, so of course you have more income inequality. I would answer that two ways. One is that we had a pretty efficient capitalistic system in the United States in the 1940s and 1950s and 1960s, and incomes were growing more equal rather than less. If you think that things have changed a lot since then, then you can look to Europe and you will find that there is a trend towards inequality around the world - it is true, in incomes -but it is nowhere near as pronounced in other countries.

WERTHEIMER: It's part of the American dream, certainly, that everybody should be able to make it, that people should be able by the sweat of their brow and their hard work and their brains, get rich. But it's also part of the American dream that we're all kind of in this together, small town America, everybody pulling for everybody else. Are any of those dreams still any kind of a reality? You seem to be saying probably not.

Mr. NOAH: Well, a lot of people say so what if we have unequal incomes, we have a great deal of mobility in the United States. Anybody can grow up to be president. But in truth, social mobility has actually decreased over the last 40 years. There's still a fervent belief that that is what defines the United States, but it is less true now than it used to be.

WERTHEIMER: Timothy Noah, thank you very much.

Mr. NOAH: Thank you so much, Linda.

WERTHEIMER: Timothy Noah is a senior writer at the online magazine Slate.

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